Planning for Life

There is a lot of confusion about the difference between SSI (Supplemental Security Income) and SSDI (Social Security Disability Income). Although SSI and SSDI both provide supplemental income to disabled people, and have similar names, they are completely different programs.

What is the same

They are both administered by the Social Security Administration, they both provide a monthly cash subsidy, and they both use the same criteria to determine whether a person is disabled. A child is considered disabled if he has a medically determinable physical or mental impairment that results in marked and severe functional limitations, and that has lasted (or is expected to last) for at least one year or to result in death. An adult is considered to be disabled if she is not capable of substantial gainful employment. Ordinarily a disabled adult recipient must earn less than $1,080 a month to be considered disabled.

Everything else is different

SSI is needs-based, SSDI is not.

SSI is only for those with financial need who have little or no money; SSDI operates more like a pension, payable regardless of your wealth or unearned income.

SSI is a monthly stipend provided to elderly, blind, or disabled persons based on financial need. It is only available to disabled individuals who have very limited income and assets. (The recipient can have no more than $2,000 in countable assets.)

SSDI, on the other hand, has no asset or unearned income limitations (although there are limits on earnings). Iit is based on what you – or sometimes your parents -- paid into the system, by way of Social Security taxes. In order to receive SSDI benefits, an individual generally must have worked and paid Social Security taxes for at least 10 years prior to her disability (less for those age 31 or younger). Those who can show that they were disabled before the age of 23 can collect based on their parents’ work records, once the parents are collecting Social Security payments themselves, or are deceased.

The Benefits

Another main difference between the two programs is the size of the benefit received and the way that benefit is calculated. The SSI benefit is a fixed amount. For 2016, the maximum federal benefit for an individual is $733 a month, and in Massachusetts there is an additional state supplement of $144 a month, for a total of $877 a month. The SSI benefit is reduced dollar for dollar (with some exceptions) for any other income the individual may receive (cash, SSDI, dividends, etc.). This means that once an SSI recipient's income reaches a certain level in a month, she will not receive an SSI benefit for that month.

An SSDI benefit is based on the amount the disabled person paid into the Social Security system before becoming disabled, or, if a disabled child is receiving SSDI based on the parent’s work records, the amount of Social Security benefits the parent is receiving. A disabled child is entitled to 50 percent of a living parents’ Social Security benefits (this is in addition to, and does not decrease, the parents’ benefits, with some exceptions), and 75 percent of what a deceased parent was receiving prior to death.

Health Care

Both SSI and SSDI recipients may receive government-funded health care based on their disability. SSI recipients automatically receive health care coverage through MassHealth, without needing to apply. SSDI recipients automatically receive health care through the Medicare program after a two-year waiting period. SSDI recipients whose incomes are below the SSI benefit amount can also qualify for SSI and receive both Medicare and MassHealth. This is called dual eligibility.

Eligibility

As mentioned above, in order to receive either SSI or SSDI, the Social Security Administration must determine that the person is “disabled.” SSI has additional financial eligibility criteria – the recipient can have no more than $2000 in assets, and must have low income. For SSI, a parent’s income and assets are considered the child’s income and assets until the child turns 18, and therefore the parents’ wealth affects the child’s eligibility for SSI. Upon reaching age 18, a disabled person is only considered to own what is in her own name – even if she is still living with her parents – and at that time may qualify for SSI based on her own resources and income.

SSDI has no asset or unearned income limitations. For SSDI, people determined by the Social Security Administration to be disabled may begin to receive SSDI payments based on their parent's Social Security earnings record when their parent is deceased or begins to collect Social Security benefits. Also, if the disabled person was able to work and earn the requisite credits, he or she can collect SSDI based on their own earnings. Although the amount of the SSDI payment may be small (less than SSI), it is sometimes worth doing this in order to obtain coverage from Medicare.